STRUCUTURE OF THE ECONOMY
Beginning in the late 1978, China Economy has been moving to a more market oriented economy. China decollectivized agriculture, yielding tremendous gains in production.
Driven by a sharp rise in the procurement price paid for crops and what amounted to the semi-privatisation of agriculture, the share of agricultural output in total GDP rose from 30% in 1980 to 33% three years later. However, after that the share of agriculture has fallen fairly steadily, and by 2002 it accounted for only 15.4% of GDP. Thus , even with these improvements, agriculture accounts for only 20% of the nation's gross national product.
The structural changes gave increased authority of local officials and plant managers in the industry, permitted a wide variety of small-scale enterprises in service and light manufacturing. Due to its increasing openness to foreign trade and investment, in 1999, China Economy became the second largest economy of the world after the USA, in terms of GDP.
At present, more than half of the population depends on agriculture for living. However agriculture's contribution to GDP has remained low.
Significantly large share of industrial production in GDP, characterized the Chinese economy, much before the start of economic reforms there. In 1978, industry accounted for 50% of officially measured GDP. This was particularly striking because so much of the workforce remained on the land. The relative share of the services sector has since remained steady ( 33% in 2003), and the continued shrinkage in the relative contribution of agriculture has been reflected in a larger share for the industrial sector, which in 2003 accounted for around 52.3% of GDP.
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Most of the agricultural production is restricted in the east. china is the world's largest
producer of rice and wheat, among cash crops, china ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.
china ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork). Due to improved technology, the fishing industry has grown considerably since the late 1970s.
Apart from crops and food products, china is one of the world's major mineral-producing countries. Coal is the most abundant mineral (China ranks first in coal production). There are also extensive iron-ore deposits; the largest mines are at Anshan and Benxi, in Liaoning province. Oil fields discovered in the 1960s and after made china a net exporter, and by the early 1990s, china was the world's fifth-ranked oil producer. Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.
Coal is the single most important energy source; coal-fired thermal electric generators provide over 70% of the country's electric power. China also has extensive hydroelectric energy potential.
Major industrial products are textiles, chemicals, fertilizers, machinery (especially for agriculture), processed foods, iron and steel, building materials, plastics, toys, and electronics.
ROLE OF STATE vs MARKET
Until 1978, industrial output was dominated by large state-owned enterprises (SOEs). Gradually, the share of state-owned and state-holding enterprises in gross industrial output value had shrunk; in 2002 it was around 41%. However, state-owned companies, controlled by economic ministries in Beijing (Capital of China), represented only 16% of industrial output. State-holding enterprises may control large numbers of state firms, and are not 100% state-owned.
The changes in economic policy, including decentralization of control and the creation of "special economic zones" to attract foreign investment, led to considerable industrial growth, especially in light industries that produce consumer goods.
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